How long can it go on?

Staff at the Independent are used to living with uncertainty but INM's failure to repay a £179m bond, a move to the Mail's offices and more rumours of a sale have taken morale to a new low, says ex-staffer Ciar Byrne

Roger Alton, the editor of the Independent, held a meeting in his office to rally the troops a few weeks ago. Alton is well liked by staff, but his battle cry backfired somewhat when he joked that he was considering disappearing to run an apple farm. "After that meeting there was a state of turmoil amongst journalists because we hadn't had the confident answer we needed," says one staffer, who prefers not to be named.

"What is noticeable is this unease and uncertainty in the newsroom," says another journalist. "There is a lot of speculation and spurts of panic."

For the most part, journalists at the Independent and the Independent on Sunday - at least those who remain after two rounds of redundancies in as many years - are pretty sanguine about the latest twist in the saga of the newspapers. They have been through it all before, with naysayers long predicting the demise of the titles. But even the most accepting of Indy scribes had to admit things looked bleak when the titles' parent company, Independent News & Media, was forced to announce last week that it had failed to reach an agreement with lenders over a €200m (£179m) bond that it cannot repay, throwing the future of its flagship newspapers further into doubt, and making a sale or even closure more likely.

What does this mean for journalists working there? Until recently, I was one of them, but in March, after five years, I took voluntary redundancy. The departure of high-profile journalists - including the original staff member and business editor Jeremy Warner, who did not take redundancy when he left for the Telegraph - has increased the tension.

INM, which announced losses of €161.4m for 2008, is believed to be under pressure from bond holders to dispose of the Independent titles, which are understood to lose at least £10m a year. The daily title's circulation has fallen in the past year - it was 17% down, year on year, in March - and advertising is forecast to decline by "20%+" over the next year. Denis O'Brien, the Irish billionaire who owns 26% of INM, is also keen for management to sell the newspapers unless they can be made profitable.

But, in the absence of any obvious buyers, talks with the Daily Mail & General Trust did not get far, while despite speculation that the London Evening Standard's new owner, Alexander Lebedev, will buy the Independent, it has so far failed to happen. Tony O'Reilly, who is about to hand over as the chief executive of INM to his son Gavin, must hope that a cost-saving office-sharing arrangement with the Daily Mail will buy time for the newspapers until the economy improves.

The Independent is poised to move from London's Docklands to the Kensington headquarters of Associated Newspapers, the owner of the Daily Mail and the Mail on Sunday. Some departments, including the managing director and former editor Simon Kelner and his team, are moving this week. Others, such as news, will follow at the end of the month. Not only are Independent journalists unhappy about sharing office space with the Mail - a newspaper that pursues a very different style of journalism to their own - they have concerns about their new home, with rumours flying that they are being relegated to a back room with a separate entrance. They have been told that space at their new workstations is limited and each journalist can only take one box of belongings.

Since the recent restructuring at the Independent, which resulted in about 60 editorial posts being cut from the newspaper and its Sunday sister title, reporters have been asked to write their stories to fit and news editors have been asked to take on the role of subeditors. Although there are earlier deadlines, this is not because of a web-first policy, in contrast to many of its national rivals. While some can see that once they have mastered the new system it will be fairly efficient, one flaw in the plan is that a large number of writers still file copy by email from outside the office. Alton insists that things are going as well as can be hoped for in a difficult climate. "The Independent has fantastically talented journalists, they are very industrious and generous with their time," says the former editor of the Observer. "Certain other bloated newspaper groups would do well to remember that."

He downplays the impact of last week's news. "I'm a journalist, not a businessman. We're getting on with doing the job of producing a newspaper in difficult circumstances. The future of all print media is in the melting pot."

Kelner has said that the group is working flat out to "get as close to breakeven as we can while preserving the quality of the paper". When the latest round of redundancies was announced in November, he told the 430-strong staff that those who remained would have to work 25% harder. That workforce has been reduced by 90 - and 60 of those job cuts came from an original editorial team of 250.

Workload was a consideration for the former chief comment subeditor Chris Schuler, who opted for redundancy to allow him to focus on writing a travel book about Eastern Europe. Schuler's decision to leave after a decade at the paper was influenced by moving away from a nine-day fortnight as well as "the state of the paper and the thought that we might not have a job in six months anyway". He adds: "I think the job was eating my life, certainly my partner thought that, because the hours were so anti social and working in production was getting more and more mechanistic; we were content-processing, rather than editing."

This sentiment is echoed by the reporters, who are itching to get out of the office on stories, but find themselves chained to their desks rewriting wire copy. For some, voluntary redundancy has been a positive thing. Some have gone off to fulfil long-cherished ambitions to write books or film scripts, one to complete an anthropology degree, while the former personal finance editor James Daley has embarked on a political career and has just become a Labour council candidate.

The NUJ has negotiated a decent package for those leaving, including a month's pay for every year of service plus notice and a retraining grant of up to £2,000. But, having failed to find all the redundancies they wanted on a voluntary basis - and having turned down some award-winning applicants felt to be indispensable to the papers' success - management set about a compulsory redundancy process that did little to boost morale.

Individual journalists were told they would be assessed on a set of criteria including accuracy and timekeeping, but many felt the process was unfair, particularly after one subeditor, renowned for her accuracy, was asked to leave.

Black Wednesday was 11 March when those targeted for compulsory redundancy were told of their fate. Some were surprised to find some of the younger, cheaper reporters, who represented good value for money for the papers, were among them. Some challenged the decision successfully and were allowed to stay on.

Bill Hagerty, the editor of the British Journalism Review, says: "It would be an absolute tragedy if the Independent was to go to the wall and Tony O'Reilly deserves huge credit for the way he has kept it going. He's an extraordinary proprietor. People have always said there's someone around to buy a national newspaper. Let's hope there's a shining knight for the Independent. It is, in many ways, still a fine newspaper, although terribly under-resourced."

In his book My Trade, the former Independent editor Andrew Marr recounts a meeting between O'Reilly and the Daily Mail proprietor, Vere Rothermere. O'Reilly asked Rothermere for his advice on how to turn the Independent around. "Well Tony," came the reply. "The first thing is that you have to have a lot of money. Then you have to spend a lot of money - for year upon year upon year. And then ... very occasionally, sometimes, it works."